art, but the development process can be rationalized much more effectively. The idea of testing new product has always met with resistance and only spot usage of this technique has been made. In an admirable attempt to change this, Furniture Brands claims it is testing new products now. It remains to be seen how they will be able to avoid tipping their hand and giving their competitors the chance to copy their new introductions before they get to market.
Design piracy continues to be a real problem. Prior to the globalization of furniture, producers could at least keep new designs under wraps in their factories until the products were shown at market. The ‘knock-off artists’ could then copy them right away or wait to see if they sell at retail before doing so. Now, there may well be opportunities to see the prototypes in Asia before they get to market. Frequently, Asian producers are pleased to show you what they produce for their other customers.
This blatant practice of copying is often encouraged by retailers, but it only serves to confuse the consumer and lead to a sameness of design offerings. Most of all, it hurts the innovative companies that invest in fresh designs that are needed to attract new consumers and generate sales growth. The only way for the innovators to cope with this is by staying ahead of the imitators and improving their speed to market. This can be accomplished by rationalizing the new product development process, yet scant attention has been given to this concept.
Can Factory-less Execs Learn to Live with the Consumer?
It is no secret that the industry has long been factory-oriented and blissfully unaware of the end user. Now the factories are shut down, and it is time to turn management attention to the end user. The ongoing lack of marketing in the industry is striking. Furniture people know how to make furniture. It remains to be seen whether or not they know how to market furniture. Now that they have taught the Asians how to make it, they simply must become adept at marketing and distribution, or those functions will also be handed over to the offshore producers.
Not that long ago, nearly all consumer electronics were produced and marketed in America. The strong line-up of brands included Magnavox, GE, Sylvania, Motorola, Emerson, Zenith, and a host of niche players, like Scott, Fisher, Harmon-Kardon, and KLH, aimed at the audiophile segment. The development of solid state components and color televisions added a huge stimulus to sales, but in the late sixties imported electronic ‘chassis’ started to arrive from Japan. Soon, they began to show up in lower-cost models, but they were not taken seriously. After all, in those days, “made in Japan” meant cheap and shoddy. Despite this, in a few short years, the Americans ceased making nearly all consumer electronics and let the Japanese have the business. But what about those wonderful brands? A few migrated to other segments; most disappeared. Now the market is served by companies with names like Sony, Mitsubishi, Samsung, Panasonic, and LG.
The same thing can happen in furniture. Some offshore producer will become frustrated with his American customer/partner and decide to buy him out. This may already be happening. If
FURNITURE INDUSTRY WATCH REPORT SEPTEMBER 2009